At the risk of being too snarky, I’ll avoid answering this by saying, “Because the UBPR and regulators calculate it wrong”, and instead illustrate the difference and let you decide.

Just so we’re clear, the Non-Core Funding Dependency Ratio (NCFD) is a typical measure of contingency liquidity. This ratio measures the relationship between long-term earning assets and net short-term funds. Long-term earning assets are securities which mature beyond one year and all loans. Net short-term funds are large CDs, brokered deposits less than $100K, foreign deposits, fed funds purchased, repos, and other borrowings maturing within one-year, net of short-term investments. A rule of thumb is that the lower the NCFD ratio the better. When the bank's short-term investments exceed its short-term borrowings this ratio will be negative and is usually considered a good thing since it reflects a greater capacity to acquire additional assets and liabilities. This snapshot ratio exposes the reliance on "non-core" sources to fund the bank's long-term asset base.

Let’s take a look at two different NCFD calculations for a sample bank (click on the image to see it full size):

The only difference between the two is the “Total Securities” amount which results in the two different NCFD ratios 53.00% versus 52.75%. So, why does A/L BENCHMARKS use a different total securities amount? Because we still include “Equity securities that do not have readily determinable fair values” as part of total securities, the call report does not. The call report used to…prior to March 31, 2001. I’m not sure why it’s now included as an “other asset” because it still can produce income which is included as part of margin. If its income is part of margin, the balance should be reported as an earning asset, not as an other asset. Otherwise you’re going to overstate the bank’s yield.

So, yes A/L BENCHMARKS reports NCFD differently. In this case the difference is 0.25%, that’s one-quarter of one percent (in almost all cases the difference is this small)…is it enough of a difference to worry about? I don’t think so.